India-China border-treaty hoped to improve ties, facilitate trade

April 13, 2005 India and China have settled long-time border disputes, and with freed up cross-border traffic look to creating what would be the largest trading bloc in the world, between the two most populous nations on the planet. During a recent visit by Chinese Premier Wen Jiabao to the Indian capital of, a border was finally agreed on paper.

"India and China can together reshape the world order," Indian Prime Minister Manmohan Singh said Monday.

"China has a large manufacturing base. I believe it is the world's factory. And India with its development in software and other areas, I feel, is the world's office. What I am suggesting is to bring together the factory and the office," Chinese Ambassador to India, Sun Yuxi, had said ahead of the visit.

The agreement is the first official document for the 3,500 km disputed border between the two countries, in more than 20 years. The dispute erupted into war in 1962, followed by a 14 years freeze in diplomatic relations.

China would give up claims on 90,000 square kilometers to the North-East of India, formally recognising as parts of India, &mdash; a  kingdom that merged with India in 1975 &mdash; and  &mdash; an area in  which China had repeatedly claimed.

India would be formally recognising Tibet as a part of China, giving up, uninhabited land on the plateau that  seized from the Indian states of  in 1962. India agreed also "not to allow Tibetans to engage in anti-China political activities on its soil", according to a report in The Economic Times of India.

A new cross-border trade route would be allowed through, in Sikkim, and significant road work was to facilitate higher traffic, at least on the Chinese side.

Eleven guiding principles and political parameters for resolving the disagreement, were put forth in the document, including a commitment to enhance bilateral trade from the present 13.6 billion to US$30 billion by 2010 &mdash; trade which only a decade ago was worth just US$1 billion.

"This matter tells us that as long as the two sides bear sincerity, and patience, the border between China and India will become a bridge linking the friendship of the two sides," Wen said of the document he signed with Singh.

"A growing and stable China is in the interest of India. Similarly, a growing and stable India is in the interest of China," the Chinese Premier said.

"It shows a lot of give and take on both sides," said National Security Adviser M.K. Narayanan, India's special representative for the border talks.

The treaty "respect[s the] status quo, and is tantamount to accepting the Line of Actual Control as the border between the two countries," said Swaran Singh, a China expert at the Jawaharlal Nehru University in New Delhi.

"The next two years are very crucial to determine how much the two sides put the guiding principles into practice for the actual demarcation of the frontier," he cautioned.

Feasibility of a China-India Free Trade Agreement would be examined &mdash; with China eager, but India tentative.